The 2010 G-20 Seoul Summit was the fifth meeting of the G-20 heads of government, to discuss the global financial system and the world economy, which took place in Seoul, South Korea, on November 11-12, 2010. Specifically, the major topics were ensuring global economic recovery, framework for strong, sustainable, and balanced global growth, strengthening the international financial regulatory system, modernizing the international financial institutions, global financial safety nets, development issues and the risk of a currency war.
Main accomplishments of G20 Seoul Summit
- The G20 Seoul Summit has confirmed the 6-percent shift of quota shares to emerging economies in the International Monetary Fund, according to the joint communiqué issued after the end of the summit. The communiqué also said greater representation for emerging economies at the IMF Executive Board through two fewer advanced European chairs, and the possibility of a second alternate for all multi-country constituencies.
- The G20 leaders agreed on a standstill on trade and investment restrictions to avoid protectionism, and the Korea Initiative, which addresses a global financial safety net and development issues. They also reaffirmed political will for an early settlement of the DDA (Doha Development Agenda), preventing all forms of protectionism and expand trade liberalization in order to promptly bring the DDA to a successful and balanced conclusion.
- The leaders endorsed the Financial Stability Board’s (FSB) policy framework for reducing the moral hazard of systemically important financial institutions (SIFIs), including the work processes and timelines set out in the report submitted to the Summit. Specifically, G20 leaders agreed to endorse the FSB’s policy recommendations, prepared in consultation with the IMF, on increasing supervisory intensity and effectiveness. They also endorsed its recommendations for implementing OTC derivatives markets reforms, and principles for reducing reliance on external credit ratings.
- The G20 leaders welcomed the creation of a Flexible Credit Line (FCL) and Precautionary Credit Line (PCL) as new preventative tools to cope with future crisis. Countries with strong fundamentals and policies will have access to a refined FCL with enhanced predictability and effectiveness. Moreover, the PCL will allow countries with sound fundamentals and policies, but moderate vulnerabilities, to benefit from the IMF’s precautionary liquidity provision.
- G20 Summit used to be an inter-country dialogue; however, G20 Seoul Summit became a premier forum for global economical coordination by adding the private forum for global economical coordination by adding the private channel to it. The business summit in fact introduced a new model where the government and private sector cooperate on a global level.
- The leaders reiterate their commitments to completing an ambitious replenishment for the concessional lending facilities of the MDBs, especially the International Development Association, to help ensure that LICs have access to sufficient concessional resources.
Significance of G20 Seoul Summit
Due to the differences in the speed and extent of economic recovery among the G20 member countries, the sense of urgency once they shared has evaporated and spirit of cooperation have been significantly weakened when compared with the time during the 1st Washington Summit, which was held in 2008. G20 Seoul Summit sure became a turning point for building a new management system for the world economy in the coming future. Especially, the conflict between the U.S. and China over the value of the yuan has been escalating notably and a number of key countries have diverged in their positions on the G20’s core issues, which have given enough burdens for Korea in its efforts to generate fruitful outcomes from the Summit. The G20 Seoul Summit, so far, became a turning point for building a new management system for the world in the coming future. Korea’s effort to the development in the G20 deliberations has been recognized by the world, taking a step forward with leadership. G20 Seoul Summit will become one of most important parts of future summit meetings.
2011 is the year of France’s presidency of G20. The goal for this year set by the group’s leaders at last year’s summit in Seoul is to reach agreement in the first half of 2011 on a list of “indicative guidelines” for quantifying imbalances to prevent a repeat of the global economic crisis. In addition, France has more priorities for the year: firstly, to agree on tougher regulation to curb volatility in food and fuel prices and here come the antagonisms between the nations who produce and export commodities and those who seem to the biggest consumers of commodities. Secondly, to negotiate the inclusion of China’s yuan in the basket of currencies underpinning the IMF’s Special Drawing Rights. Not only that, development, innovative financing, and employment and social issues are major topics need to be discussed. France has expressed strong willingness to follow in the footsteps of Korea in hosting the G20 Business Summit.
JiMin Park (email@example.com)